Skip to content
Research Article Open access CC BY 4.0

The Product Life Cycle of Durable Goods

Joachim Kaldasch

Journal of Economics, Management and Trade · pp. 1–17 · Published 6 Sep 2015

10.9734/BJEMT/2015/20395

Abstract

A dynamic model of the product lifecycle of (nearly) homogeneous durables in polypoly markets is established. It describes the concurrent evolution of the unit sales and price of durable goods. The theory is based on the idea that the sales dynamics is determined by a meeting process of demanded with supplied product units. Taking advantage from the Bass model for first purchase and a logistic model for repurchase the entire product lifecycle of a durable can be established. For the case of a fast growing supply the model suggests that the mean price of the good decreases according to a logistic law. Both, the established unit sales and price evolution are in agreement with the empirical data studied in this paper. The presented approach discusses further the interference of the diffusion process with the supply dynamics. The model predicts the occurrence of lost sales in the initial stages of the lifecycle due to supply constraints. They are the origin for a retarded market penetration. The theory suggests that the imitation rate B indicating social contagion in the Bass model has its maximum magnitude for the case of a large amount of available units at introduction and a fast output increase. The empirical data of the investigated samples are in qualitative agreement with this prediction.

Product lifecycle consumer durables product diffusion bass diffusion logistic growth supply constraints

References (38)

  1. 1 Diffusion of Innovations 1 [DOI]
  2. 2 An Evolutionary Theory of Economic Change. [DOI]
  3. 3 The genetical theory of natural selection [DOI]
  4. 4 An evolutionary theory of economic change
  5. 5 A New Product Growth for Model Consumer Durables [DOI]
  6. 6 A New Product Growth Model for Consumer Durables [DOI]
  7. 7 Intermediate microeconomics : A modern approach
  8. 8 A simple substitution model of technological change [DOI]
  9. 9 Innovation diffusion and new product growth models: A critical review and research directions [DOI]
  10. 10 Why the Bass Model Fits without Decision Variables [DOI]
  11. 11 Colloquium : Statistical mechanics of money, wealth, and income [DOI]
  12. 12 A New Product Adoption Model with Price, Advertising, and Uncertainty [DOI]
  13. 13 Inside the Smart Home [DOI]
  14. 14 New-Product Diffusion Models [DOI]
  15. 15 Marketing Management: A Relationship Approach
  16. 16 A Primer on Logistic Growth and Substitution [DOI]
  17. 17 The Origin of Wealth
  18. 18 Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint [DOI]
  19. 19 A Critical Review of Marketing Research on Diffusion of New Products [DOI]
  20. 20 On the size distribution of business firms [DOI]
  21. 21 A study of the personal income distribution in Australia [DOI]
  22. 22 DRAMs as model organisms for study of technological evolution [DOI]
  23. 23 A model of multiple-unit ownership as a diffusion process [DOI]
  24. 24 Physics of self-organization and evolution
  25. 25 A Critical Review of Marketing Research on Diffusion of New Products [DOI]
  26. 26 An aggregate sales model for consumer durables incorporating a time-varying mean replacement age [DOI]
  27. 27 Markenmanagement in der Automobilindustrie [DOI]
  28. 28 Income distribution, market size and the evolution of industry [DOI]
  29. 29 Evolutionary model of an anonymous consumer durable market [DOI]
  30. 30 Evolutionary Model of Stock Markets [DOI]
  31. 31 Dynamic Model of the Price Dispersion of Homogeneous Goods [DOI]
  32. 32 Diffusion of innovations. [DOI]
  33. 33 Temporal evolution of the “thermal” and “superthermal”\nincome classes in the USA during 1983–2001 [DOI]
  34. 34 On size and growth of business firms
  35. 35 The Morphology of Price Dispersion [DOI]
  36. 36 The Product Life Cycle Concept: Buried or Resurrected by the Diffusion Literature? [DOI]
  37. 37 Diagnosing the DVD Disappointment: A Life Cycle View
  38. 38 An Empirically Based Model of the Supply Schedule in Day-Ahead Electricity Markets

Cited by 13

Dynamic Model of Markets of Successive Product Generations

Joachim Kaldasch · SSRN Electronic Journal · 2015

STRATEGY FOR BUSINESS PORTFOLIO DEVELOPMENT OF PT SEKAR LAUT, TBK.

Homisah Homisah, Idqan Fahmi, Ahmad Mukhlis Yusuf · Indonesian Journal of Business and Entrepreneurship · 2016

Learning from the sales conversion rate throughout its Product Life Cycle analysis: a case of study for the Spanish Automotive sector

Manuela Saco, Aida Galiano, Vincente Rodríguez · E+M Ekonomie a Management · 2020

Analysis of the behaviour of the clients assisted and sales variables in the different phases of the product life cycle

Aida Galiano, Vicente Rodríguez, Manuela Saco · European Journal of Management and Business Economics · 2018

Showing 4 of 13 known citations — external sources report more than can currently be individually listed.

Related research

Article metrics

Real usage data collected on this platform.

36

Page views

0

PDF downloads

17

Outbound clicks

13

Citations

Views over time

Views by country

Approximate, from request IP at view time — not citizenship or institution. Countries with fewer than 5 views are grouped as "Other".

Traffic sources

Referring site, by host.

Views and downloads exclude known bots/crawlers. Citations combines this platform's own DOI-resolved index with each external source's own reported total — see Cited by above for individually listed citing works. Last refreshed 0 seconds ago.